Managing to fluid expectations
As investment professionals, we spend a great deal of our professional lives thinking about our clients. Typically, this is done with a professional’s unemotional, rational and thoughtful process. After all, this is exactly what clients are seeking when they engage a seasoned professional to provide advice and counsel. Over the last couple of decades I have had the privilege of meeting with thousands of advisors and their clients to provide this exact type of advice as they face critical financial decisions and market realities. But it can be different when the “doctor” becomes the patient!
As a couple in our early 40s (for now) with two young children, my wife and I are in a simple financial stage: saving and investing while managing the periodic outflows that all families face. However, once in a while, large spending questions arise that give us a glimpse into the kind of clients we will one day become. For instance, this spring we broke ground on a major backyard renovation, including a swimming pool. This project could be the source of all kinds of investing parallels. Despite years of planning we have faced liquidity and solvency challenges that seemed to rival those of even the most peripheral European countries (we’ll save this for another article). However, as we are rapidly nearing completion on the project, I must admit it’s actually been a pleasant experience overall.
It’s been pleasant not because we haven’t had our challenges. In fact, the Dallas area has (thankfully) experienced a rather rainy spring – which unfortunately cost us several days of work. We also lost a few days to various construction and permitting issues. And it certainly wasn’t pleasant because of my vast construction knowledge (only enough to know I shouldn’t be involved). Instead, it was a good experience because our contractor, Sam, set reasonable expectations and exceeded them. In my opinion, this is exactly what good advisor/client relationships are like.
A good advisor will listen to their client’s needs and create a plan designed to get them where they want to go. After working through the plan and taking the client’s feedback, a good advisor manages the process to make sure that the client is on track to accomplish these goals. As challenges are encountered along the way, good advisors and their clients communicate together about what changes need to be made (and more importantly, what changes don’t need to be made). In the end, good advisors help their clients accomplish the outcome they are seeking.
As “clients,” my wife and I were lucky – our project manager, Sam, is a long-term friend. We knew he possessed not only competency, but more importantly, good character. That relationship enabled Sam to adjust our expectations throughout the process as circumstances changed. In the same way, building a base of trust and a good rapport with your clients is crucial so that you can work together in good times and bad.